UK - Transfers and early retirements requests at one of the KPMG pension funds have been suspended pending a judicial review of the scheme.
The restrictions which have been placed on the £250m KPMG Pre-April 2000 Fund is the latest development in a long-running dispute over a £71m deficit in the scheme.
The changes and application to the court were explained in a letter sent to members from scheme trustees Aon Trust.
KPMG’s legal application will focus on whether the scheme can invoke a deficit clause in its trust deeds, which means that the firm can reduce benefits if a shortfall should ever arise – and if so whether it can reduce the value of pensions in payment.
Aon will be claimant in the court proceedings with KPMG and representative beneficiaries as defendants.
KPMG will also be asking the court to rule if the scheme is a money purchase or defined benefit scheme.
The letter to the scheme’s 6800 members also revealed the scheme’s previous trustees – Capita Trustee Services, which was sacked by KPMG last December – had switched the fund’s investment portfolio completely to bonds.
Aon Trust is currently reviewing that decision using Lane Clark & Peacock as its investment adviser.
Actuaries estimated that at March 31, 2002, the fund had assets with a market value of £250m but the scheme could eventually have to pay out £321m in benefits.
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